ITO 3(2)(3), MUMBAI V. KOTAK FOREX BROKERAGE LTD, MUMBAI

ITA 4370/MUM/2012

• Counselvise Citation: 437019914 RSA 2012
• Duration Of Justice: 3 year(s) 1 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-08-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 12-02-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 27-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: CHETAN KAKKA
• Keywords: Depreciation
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH A BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI SANDEEP GOSAIN, JUDICIAL MEMBER I.T.A. NO. 4370 /MUM/2012 ASSESSMENT YEAR : 2003-04 INCOME TAX OFFICER - 3(2)(3) ROOM NO.673, 6 TH FLOOR, AAYKAR BHAVAN, MK ROAD, MUMBAI 400 020 VS. M/S. KOTAK FOREX BROKERAGE LTD., 1 ST FLOOR, BHAKTAWAR, 229, NARIMAN POINT, MUMBAI 400 021. PAN : AA ACK 5920G ( APPELLANT ) .. ( RESPONDENT ) C.O. NO.38/MUM/2014 (ARISING OUT OF ITA NO.4370/MUM/12, A.Y.2003-04) M/S. KOTAK FOREX BROKERAGE LTD., 1 ST FLOOR, BHAKTAWAR, 229, NARIMAN POINT, MUMBAI 400 021. VS. INCOME TAX OFFICER - 3(2)(3) ROOM NO.673, 6 TH FLOOR, AAYKAR BHAVAN, MK ROAD, MUMBAI 400 020 ( CROSS OBJECTOR) .. (APPELLANT IN APPEA L) REVENUE BY SHRI MANOJ KUMAR R E SPONDENT BY : SHRI CHETAN KAKKA DATE OF HEARING : 18/08/2015 DATE OF PRONOUNCEMENT : 18/08/2015 I.T.A. NO. 4370 /MUM/2012& CO 38/MUM/2014 ASSESSMENT YEAR : 2003-04 2 O R D E R PER G.S. PANNU, AM THE IMPUGNED APPEAL BY THE REVENUE AND CROSS OBJECT ION BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER PASSED BY C IT(A)-4, MUMBAI DATED 25/4/2012, PERTAINING TO THE ASSESSMENT YEAR 2003-04, WHICH IN- TURN HAS ARISEN FROM AN ORDER PASSED BY THE AS SESSING OFFICER DATED 19/11/2010 UNDER SECTION 143(3) R.W.S. 147 OF THE I NCOME TAX ACT, 1961 ( IN SHORT THE ACT). 2. IN THE APPEAL OF THE REVENUE, THE SOLITARY GRIEV ANCE IS AGAINST THE ACTION OF THE CIT(A) IN ALLOWING DEPRECIATION ON TH E AMOUNT OF GOODWILL AMOUNTING TO RS.30,90,938/-. THE ASSESSING OFFICER HAD DISALLOWED THE ASSESSEES CLAIM FOR DEPRECIATION ON GOODWILL ON TH E GROUND THAT THE SAME WAS NOT COVERED UNDER SECTION 32(1)(II) OF THE ACT. 3. IN BRIEF, THE RELEVANT FACTS ARE THAT IN THE PRE VIOUS YEAR, RELEVANT TO THE ASSESSMENT YEAR 2001-02, THE ASSESSEE COMPANY HAD ACQUIRED THE FOREIGN EXCHANGE DEALING BUSINESS FROM M/S. UDAY S. KOTAK, FOR A CONSIDERATION OF RS.5.90 CRORES, WHICH INTER-ALIA INCLUDED A PAYMENT OF RS.1.88 CRORES ON ACCOUNT OF GOODWILL. THE ASSESSE E CLAIMED I.T.A. NO. 4370 /MUM/2012& CO 38/MUM/2014 ASSESSMENT YEAR : 2003-04 3 DEPRECIATION @25% ON THE AMOUNT OF GOODWILL, CLA IMING IT TO BE AN INTANGIBLE ASSET OF THE NATURE REFERRED TO IN SECTI ON 32(1)(II) OF THE ACT. IN ASSESSMENT YEAR 2001-02, THE ASSESSING OFFICER D ENIED SUCH A CLAIM. BASED ON SUCH STAND OF THE ASSESSING OFFICER IN THE PAST, IN THE YEAR UNDER CONSIDERATION ALSO, ASSESSING OFFICER DENIED THE CLAIM OF THE ASSESSEE FOR DEPRECIATION ON GOODWILL AMOUNTING T O RS.30,90,938/-. 4. THE CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE NOT ING THAT IN THE ASSESSMENT YEAR 2001-02, THE MUMBAI BENCH OF THE TR IBUNAL VIDE ITA NO.2692/MUM/2007, ORDER DATED 6/8/2009 HAD ALLOWED THE CLAIM OF THE ASSESSEE HOLDING THAT GOODWILL WAS AN INTANGIB LE ASSET OF THE NATURE REFERRED TO IN SECTION 32(1)(II) OF THE ACT. AGAINST SUCH DECISION OF THE CIT(A), REVENUE IS IN APPEAL BEFORE US. 5. BEFORE US, IT WAS A COMMON POINT BETWEEN THE PA RTIES THAT SIMILAR ISSUE HAS BEEN DECIDED BY THE TRIBUNAL IN ASSESSEE S OWN CASE FOR A.Y 2001-02 (SUPRA) AS WELL AS IN ASSESSMENT YEARS 200 5-06 AND 2006-07 VIDE ITA NO.4273/MUM/2008 AND4065/MUM/2011 DATED 28 /10/2009 AND 29/3/2012 RESPECTIVELY. I.T.A. NO. 4370 /MUM/2012& CO 38/MUM/2014 ASSESSMENT YEAR : 2003-04 4 6. IN VIEW OF THE AFORESAID PRECEDENTS, WE HEREBY A FFIRM THE ORDER OF THE CIT(A) GRANTING DEPRECIATION ON GOODWILL AMOU NTING TO RS.30,90,938/-. 7. THUS, THE APPEAL OF THE REVENUE IS DISMISSED. 8. IN SO FAR AS, THE CROSS OBJECTION FILED BY THE A SSESSEE IS CONCERNED, THE SAME RELATES TO THE VALIDITY OF THE PROCEEDINGS INITIATED BY THE ASSESSING OFFICER BY ISSUANCE OF NOTICE UNDER SECT ION 147/148 OF THE ACT. 9. AT THE TIME OF HEARING, LD. REPRESENTATIVE FOR T HE ASSESSEE SUBMITTED THAT ONCE ASSESSEE SUCCEEDS IN THE CONTEX T OF APPEAL FILED BY THE REVENUE, THEN THE ISSUE RAISED IN ITS CROSS OBJ ECTION IS RENDERED INFRUCTUOUS. THUS, IN SO FAR AS THE CROSS OBJECTIO N OF THE ASSESSEE IS CONCERNED, THE SAME IS DISMISSED AS INFRUCTUOUS. I.T.A. NO. 4370 /MUM/2012& CO 38/MUM/2014 ASSESSMENT YEAR : 2003-04 5 10. THE ABOVE DECISION WAS PRONOUNCED IN THE OPEN C OURT IN THE PRESENCE OF BOTH THE PARTIES AT THE CONCLUSION OF T HE HEARING ON 18 TH AUGUST, 2015. SD/- SD/- (SANDEEP GOSAIN) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI,DATED: 18/08/2015 VM. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) - 21 , MUMBAI 4. CIT - 10 , MUMBAI 5. DR, ITAT, MUMBAI A BENCH 6. GU ARD FILE . BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI